This paper develops an endogenous directed technical change model that is consistent with the data on the distribution of firms and production across high- and low-tech sectors, and its relationship to economic growth, in a number of developed countries. We argue that scale effects at the...

This paper studies the firm size distribution arising from an endogenous growth model of quality ladders with expanding variety. The probability distribution function of a given cohort of firms is a Poisson distribution that converges asymptotically to a normal of log size. However, due to firm...

We revisit the issue of self-fulfilling "waves of enthusiasm" as stationary rational expectations equilibria in tournament models of horizontal and vertical R&D. By considering a lab-equipment specification, the model predicts a positive effect of animal spirits on the balanced-growth-path (BGP)...